Loyalty points issued to customers by a wireless telecommunications company are treated as in-store (retailer) coupons, for purposes of Tennessee sales and use tax. When customers redeem points for a discount on goods or services, the points act as an in-store coupon. The discount is excluded from the taxable sales price, and the sales price equals the net amount paid for the item or service. Use tax is not imposed on the taxpayer when points are exchanged for discounted property, unless the taxpayer fails to collect and remit the proper amount of sales tax on the sale. Points redeemed for nontaxable goods or services are not subject to tax, unless the nontaxable goods or services are bundled with taxable goods or services and sold for a single charge.The sales price of a customer’s monthly service plan is not reduced when the customer receives loyalty points.(Letter Ruling No. 12-30, Tennessee Department of Revenue, November 21, 2012)